One-glance verdict
Undervalued
$143.48 our estimate vs market $57.02
Wall Street consensus: $56.89 (-60.3% lower than our fair-value estimate)
60% below our estimate, below the bear case
Fundamentals snapshot
PayPal Holdings, Inc.
PYPL · NMS · Financial Services · Credit Services
Current price
$57.02
52-week range
$38.46 - $79.22
Market cap
$48.78B
Balance sheet
Healthy
14.50x Strong cushion
Net debt $2.96B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 1.7% last year.
- Reward Returns 24.5% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 10/10 years.
What this company does
PayPal Holdings, Inc.
PayPal operates a digital payment platform, including popular apps like Venmo, that connects shoppers with merchants (businesses that sell goods or services). The company earns most of its money by taking a small fee from each sale it processes. This means its success is tied to the total number of people and the amount of money flowing through its system, as more spending leads to higher revenue (the total money a company brings in from sales before any costs are taken out).
How the company got here
Originally named Confinity and co-founded by tech entrepreneurs including Peter Thiel and Elon Musk in 1998, the company launched its online payment service the next year. It grew rapidly alongside the online auction site eBay, becoming so popular that eBay acquired it for $1.5 billion in 2002. For over a decade, PayPal was eBay's primary payment method, but in 2015, it was spun off into a separate, publicly traded company. Since then, it has expanded significantly by acquiring other technology companies, including the payment gateway Braintree and the popular peer-to-peer payment app Venmo.
What it actually does
PayPal operates a technology platform that allows people and businesses to send and receive money for things they buy online and in person. It acts like a digital wallet, connecting a customer's bank account or credit card to a merchant's account without sharing the customer's private financial details with the seller. This creates a two-sided network: millions of shoppers who use PayPal for its convenience and security, and millions of businesses that accept it to make it easy for those shoppers to pay. The company offers a range of services under different brand names, including its main PayPal service, Venmo for personal payments, and Braintree for businesses to process payments.
Transaction (Branded Checkout & P2P)
This is the company's largest and most well-known business, making up the vast majority of its revenue (the total amount of money the company brings in from sales). It primarily makes money by charging merchants a fee—typically a percentage of the transaction plus a small fixed amount—each time a customer uses the PayPal button to check out online. This segment also includes fees from services like Venmo, where users are charged for things like instant transfers to a bank account or payments made with a credit card. Sending money directly to friends or family from a linked bank account or PayPal balance is usually free for consumers.
Payment Processing (Braintree)
Through its Braintree division, PayPal provides the underlying technology that allows online and mobile businesses to accept a wide variety of payments beyond just the PayPal button. This service works behind the scenes to process payments from credit cards, debit cards, and digital wallets like Apple Pay and Google Pay. Businesses like Uber and Airbnb use Braintree to handle their transactions seamlessly within their own apps and websites. PayPal makes money by charging these businesses fees for processing these payments, which is a large but lower-margin (the percentage of revenue a company keeps as profit) part of its business compared to its branded checkout service.
Other Value-Added Services
This is a smaller but growing part of PayPal's business that includes a variety of financial products and services beyond basic payment processing. It includes interest and fees from its credit products, such as 'Buy Now, Pay Later' options for consumers and working capital (short-term funding to cover everyday business operations) loans for merchants. The company also earns revenue from interest on the cash balances that customers hold in their PayPal accounts. This segment helps PayPal deepen its relationship with both consumers and merchants by offering them a broader range of financial tools.
What management is betting on now
The company's leadership is focused on accelerating growth by recommitting to its core as a technology company and improving its customer experience. A key priority is to rebalance its focus towards consumers, aiming to increase their engagement with services like the digital wallet and financial products, which in turn makes the platform more valuable to merchants. Management is also heavily investing in artificial intelligence (AI) and automation to make the company more efficient and to create more personalized experiences for users. The strategy involves simplifying the company's structure into three main business units to increase accountability and speed up decision-making.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$1.37B
FY2024 Q3
$1.45B
FY2024 Q4
$2.19B
FY2025 Q1
$964.00M
FY2025 Q2
$692.00M
FY2025 Q3
$1.72B
FY2025 Q4
$2.19B
FY2026 Q1
$903.00M
Revenue
$8.35B
Net income
$1.11B
Diluted EPS
1.21
Operating cash flow
$1.13B
Free cash flow
$903.00M
Fetching…
Sources
Revenue
$8.68B
Net income
$1.44B
Diluted EPS
1.53
Operating cash flow
$2.38B
Free cash flow
$2.19B
Fetching…
Sources
Revenue
$8.42B
Net income
$1.25B
Diluted EPS
1.30
Operating cash flow
$1.97B
Free cash flow
$1.72B
Fetching…
Sources
Revenue
$8.29B
Net income
$1.26B
Diluted EPS
1.29
Operating cash flow
$898.00M
Free cash flow
$692.00M
Fetching…
Sources
Revenue
$7.79B
Net income
$1.29B
Diluted EPS
1.29
Operating cash flow
$1.16B
Free cash flow
$964.00M
Fetching…
Sources
Revenue
$8.37B
Net income
$1.12B
Diluted EPS
1.09
Operating cash flow
$2.39B
Free cash flow
$2.19B
Fetching…
Sources
Revenue
$7.85B
Net income
$1.01B
Diluted EPS
0.99
Operating cash flow
$1.61B
Free cash flow
$1.45B
Fetching…
Sources
Revenue
$7.88B
Net income
$1.13B
Diluted EPS
1.08
Operating cash flow
$1.52B
Free cash flow
$1.37B
Fetching…
Sources
Is it cheap or expensive?
Fair value $143.48 vs current price $57.02
Wall Street consensus is the average analyst price target: $56.89 (-60.3% lower than our fair-value estimate).
Our most-likely fair value is $143.48 a share — about 151.6% above today's price of $57.02, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $3.0B. Interest coverage 14.5x.
Net debt
$2.96B
Interest coverage
14.50x
PayPal Holdings, Inc.'s profit covers its interest bill about 14.5 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
PYPL
BASELINE
PayPal Holdings, Inc.
Total debt $14.22B Interest coverage 14.50x This is the baseline the peer rows are being compared against.
Total debt $23.86B Interest coverage 45.09x +211% vs PYPL Carries about 3.1x more debt cushion than PYPL.
Total debt $24.64B Interest coverage 27.03x +86% vs PYPL Carries about 1.9x more debt cushion than PYPL.
Total debt $23.56B Interest coverage 2.27x -84% vs PYPL Carries about 6.4x less debt cushion than PYPL.
What you should know
The case for and against PYPL
3 Rewards
0 Risks
Rewards
-
Revenue grew 1.7% last year.
-
Returns 24.5% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
10.78x
Forward P/E
9.86x
P/B
2.48x
P/S
1.43x
EV/EBITDA
8.02x
PEG ratio
1.01x
Profitability
How much profit each dollar creates
Gross margin
40.5%
Operating margin
17.0%
Net margin
14.4%
ROE
24.5%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.72x
Current ratio
1.29x
Quick ratio
0.25x
Total debt
$14.22B
Total cash
$11.26B
Growth
How the business has been compounding
Revenue TTM
$33.73B
Revenue 5Y CAGR
6.9%
EPS TTM
5.29
EPS 5Y CAGR
37.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$6.39B
Free CF TTM
$5.56B
FCF margin
16.5%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
7.9%
Last ex-div date
2026-09-04